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How can you prepare for turnover growth and manage your cash flow?

According to a KPMG study, nearly 2,000 French companies are in hypergrowth, i.e. they have achieved 15% annual growth for at least three years and have a turnover of more than 3 million euros.

If such dazzling success is good news, it is not so good when the company ends up experiencing the bitter experience of insufficient cash flow, which quickly leads to a loss of speed or even a suspension of payments.

How can we avoid falling into this trap in order to support this growth in the long term?

Successful growth means validating your business model and financing

For a company, achieving rapid growth does not mean missing out on all the challenges that come with it. If not properly prepared, it can be a very difficult exercise in the long run.

It may be obvious, but in view of the longevity of certain structures, it seems important to remember that without cash flow, it is impossible to keep up with growth. Because growth means an increase in production, an increase in recruitment, an increase in the payroll, new premises... and cash flow!

This is the sine qua non for any company to support its growth.

Today, there are far too many companies that do not respect this essential rule that is vital to their future. Successful entrepreneurs are those who anticipate how their growth will affect the life of their business. They must wear this double hat to avoid being placed in receivership despite their success.

Yes, managing and sustaining growth is a difficult exercise and one that you must be prepared for!

The key: finding the right balance

Keeping pace will prove to be a real balancing act. It will be a question of being able to integrate agility into the heart of your model in order to make your company grow at the irregular pace of the growth peaks it encounters.

What worked yesterday will not necessarily work tomorrow!

As a strategist and manager at the same time, the entrepreneur is confronted with an environment where everyone is trying to get there first.

And we know it... the winner takes it all! Getting to the top of the podium means that the entrepreneur must be able to pay his deadlines and get paid so that he does not stop growing along the way and be overtaken by everyone else.

Managing growth means mobilising and maintaining the collective intelligence within the company.

At the beginning it's easy: the first employees are "ultra" enthusiastic, they are the ones who have helped raise the company to the top. But once the new ones arrive... it can be more complicated. The difficulty will indeed be to preserve this initial DNA, hence the need to communicate well and to give the same desire to the old ones by integrating the new employees as if they were the first to arrive.

This is all the more true with the new generations who are looking for something that brings them together in the company. And it is this capacity that will enable hypergrowth to be maintained!

Finally, because financing growth also means seeking external financing, the business model must already generate cash flow in order to guarantee its sustainability and effectiveness in the future.

Banks are taking less and less risk, so there are limits to be pushed through these reassuring factors! Hypergrowth only works if you have the capacity to finance your project.

Any high growth project must be able to demonstrate its ability to increase the company's cash flow

Rapid or very high growth development is based on a sustainable business model. If the business model does not demonstrate an ability to generate operating funding in the medium term, the entrepreneur will have to find external funding, risking losing his or her independence or even ending his or her story with a suspension of payments.

And because it is difficult for an entrepreneur to connect with anything other than his or her business, when working on growth projects, it is advisable to be well accompanied by an outside eye.


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